In This Article:
* MSCI Asia ex-Japan up 0.38%, Nikkei treads water
* Global PMIs show manufacturing weakness
* RBA set to cut benchmark cash rate
* Market trims bets on large Fed rate cut
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith
SHANGHAI, July 2 (Reuters) - Asian shares were choppy on Tuesday as weak global manufacturing activity reinforced worries about slowing world growth, while the initial enthusiasm over a Sino-U.S. trade truce gave way to uncertainty over whether the two nations can strike a durable deal.
Further dragging on sentiment was the U.S. government's threat on Monday of tariffs on $4 billion of additional European Union goods, in a long-running dispute over aircraft subsidies.
U.S. futures were flat, while MSCI's broadest index of Asia-Pacific shares outside Japan was down in early deals. It last traded up 0.38%, helped by a 1% gain in Hong Kong shares as investors caught up to Monday's global rally. Markets in Hong Kong had been closed Monday for a public holiday.
Australian shares managed to push up 0.27% on expectations that the Reserve Bank of Australia will cut its benchmark cash rate by 25 basis points to a record low of 1.0% at a meeting later in the day.
Japan's Nikkei was flat.
Global shares had rallied on Monday after the United States and China agreed on the weekend to restart trade negotiations aimed at resolving their nearly year-long trade war and Washington said it would postpone further tariffs.
U.S. President Donald Trump also offered concessions, including an easing of restrictions on tech company Huawei .
Yet, with the previous rounds of Sino-U.S. negotiations breaking down in acrimony, investors were now turning to the prospects of actual progress in talks to settle the dispute that has dented global trade, business investment and economic growth.
And the fresh U.S. tariff threats against Europe also point to a worrisome prospect of a broadening trade dispute, said Michael McCarthy, chief markets strategist at CMC Markets in Sydney, in a note to clients.
"The problem is the widening of the dispute. Europe, the U.S. and China account for almost two thirds of global GDP," he said. "An ongoing disruption to trade between these three major economies, prosecuted for domestic political purposes, could sink global growth."
Manufacturing surveys over the past 24 hours underscored those risks. Factory activity in the euro zone shrank faster last month than previously thought, and that U.S. manufacturing activity slowed to near a three-year low in June.